One might hope that a new year would bring with it new ideas and hope that the Australian jewellery industry could, once again, share a united and cohesive voice.
Fraught with divisiveness and politicking over the past few years, there is, or at least was, some optimism that the mandatory requirement for a new JAA president in 2019 could instill confidence among members that the past could be left behind.
As previously reported, the JAA constitution required former president Selwyn Brandt to step down from the board after seven years in the president’s chair. Many hoped that a new president, along with new faces on the board, would allow the industry to put aside the enormous division and disharmony brought to the fore when the JAA decided to launch its own jewellery trade fair.
Not only did that decision prove to be an enormous mistake, plummeting the association into a member and revenue freefall, it also caused huge embarrassment on many fronts. So, it became that 2019 was time for a new president, and Ms Jo Tory, managing director of jewellery supplier Najo, stepped up to the plate. She has a tough gig – very tough!
Australia’s so-called ‘peak industry body’ is facing enormous challenges, almost all of its own doing.
The major focus of the current JAA board of five – one position remains vacant – would surely be to reunite the industry in an attempt to put past differences behind. The split – caused by the JAA’s decision to put members’ funds at risk by creating a large commercial venture, and the resulting unseemly and tasteless conduct that followed – saw retail and supplier members walk out on the JAA en masse.
When confronted with people quitting after decades of JAA membership – along with a list of your own former board members also ‘resigning’ their membership (as the JAA calls it) – one would hope that the board could see cause for concern.
That is, if former JAA board and National Industry Advisory Council members – and even past presidents – quit the association, then surely you would see a problem? But no, the JAA pushed on throughout last year hoping the membership freefall would stop or, miraculously, reverse.
It hasn’t; JAA membership fell another 15 per cent last year, which came after a 19 per cent decline in FY17. That’s a 31 per cent drop in two years.
Worse than that, total JAA revenue fell by 18 per cent to $390,546 and the JAA’s new ‘auditor’ was not happy with the FY18 accounts, giving them a “Qualified Opinion”; and that’s not a good thing.
He challenged the board’s financial report to members over a $50,000 figure listed as an ‘asset’, indicating it should have been written off. Astoundingly, the impairment (bad debt) represented 25 per cent of the JAA’s assets as at 30 June 2018.
Larger problems
On current trends, membership fees will not even cover the (basic) costs of running the JAA office, let alone providing member benefits. One former high-profile JAA member told me, “The JAA has become nothing more than clerical office. It exists to collect member’s money to pay staff so that it can collect money next year to pay staff in order to collect more money from the industry to pay staff!”
He asked, "What's the point?"
The continuing decline in membership would indicate it’s a wide-held belief.
It may not be the only thing affecting membership; for example I have previously pointed to the ludicrous fee structure. There are 33 different membership levels (and fees) listed on the JAA website!
So, having painted the financial picture, you can begin to see why Tory is confronted with a massive task. Not only does she have to reinvigorate the JAA’s finances – it has lost a staggering $320,000–$370,000 over the past five years – Tory has to attempt to resolve the differences between a number of major and pivotal industry participants.
Can she do that?
Well, knowing the determined Tory she will give it a good shot. However, one of the hurdles she faces is the fact that she was an avid supporter of the very decisions that drove a wedge through the industry in 2016-17 when a very small group of industry suppliers convinced the JAA to launch its own, costly, jewellery tradeshow.
That was the very jewellery tradeshow that ultimately caused the JAA to lose an enormous amount of members’ money – perhaps as much as $150,000! Worse, the JAA walked away from an on-going $100,000 a year sponsorship deal with Expertise Events.
Bewildered
And therein lies my bewilderment at appointing another president from the supplier side.
The JAA is, and has always been, predominately a retailer-based association; however, not since Peter Beever in 2011 has there been a president from the retail side. That’s eight years, and if there was ever a time for the JAA to be led by a retailer, rather than being driven by self-interested suppliers, I would have thought this year was it.
While she did not make the bed in which she has chosen to lay, Tory finds herself wedged. The three people who led the JAA’s charge in 2016–2017 to walk away from Expertise Events' lucrative sponsorship and, instead, turn the association into an event organiser, are all now gone.
With Brandt stepping down last year, and former vice president Laura Sawade resigning in October 2016, and former JAA executive director Amanda Hunter departing in May 2017, the main instigators of the divisive decsions have departed. However, Tory supported the JAA’s failed venture at the time, and which brought out some of the worst ‘get even’ industry politics I have ever witnessed.
A retailer president, in my mind, would have more chance of reuniting the industry than a supplier president, especially one that actively supported the JAA’s past mistakes.
But who knows? Tory might see that as an added challenge and successfully stop the supplier bickering that has plagued the industry for so long.
Only time will tell, however; I would have thought a first step towards re-establishing industry harmony would have been phone calls to Nationwide Jewellers and Expertise Events, as well as to some of the major ‘players’ who quit the JAA throughout this shameful period.
Has Tory done that, two months into her tenure?
Who knows what would be achieved by picking up the phone in an attempt to mend some wounds? However, what we do know is that doing nothing would mean we are be set for a repeat of the past three years – with the JAA being an outlier in its 'own' industry.
Tory has a big task indeed; her success will be measured on membership numbers. Membership will only increase by the JAA accepting its mistakes and moving forward to become part of the industry once again rather than sitting in isolation attempting to act as a rent seeker.
The JAA must deal with those people it 'harmed' along the way with its sometimes shameful and tawdry actions - unbecoming of any board of directors - and, more importantly, the JAA must give retailers and suppliers a substantive reason to hand over their hard-earned dollars to join; "Because we are the JAA" no longer cuts it.
Those days are long gone.
I hope Tory, as the new broom, can sweep clean and provide that reason.
FOOTNOTE
In fairness to Jo Tory, she joined the board in February 2017 well after the disastrous decisions were made to launch the JAA Jewellery Tradeshow, which was announced in 2016. And although Tory decided that her business, Najo, would support the JAA trade show, it was later revealed that then-president Selwyn Brandt’s business would not.
That is, Brandt had been one of the creators and promoters of the JAA Jewellery Tradeshow but it subsequently came to light that his business, Australian Jewellers Supplies, would not be supporting the new event as an exhibitor!
Tory was, at least, prepared to put her money where her mouth was.
In another ironic twist, while Brandt was championing a new jewellery tradeshow that his own business did not see fit to support, it was subsequently revealed that Australian Jewellers Supplies was not a JAA member!
The incongruous twists don’t stop there; Tory is not only having to pick up the messy politics left over from this inglorious period, it is most likely she will have to contend with a substantial financial loss not of her own doing.
That is, the $50,000 debt that the JAA still carries on its books – against the advice of its new ‘auditor’ – as a result of a 2016 legal dispute, should have been written off in FY17 or at least last year.
By not bringing the loss to account in FY18, Brandt’s final term as JAA president records a $30,000 profit for the year ended June 30, 2018; if the JAA had taken the advice of its accounting firm, and complied with the Australian Accounting Standards (AAS), it would have resulted in a $19,000 loss.
This is the reason why the ‘auditor’ provided a “Qualified Opinion”.
The end result is that the huge write-off/loss is pushed forward – into Tory’s tenure as president – which correspondingly makes her job of resurrecting the JAA’s financial position all the more difficult.
She begins her term $50,000 behind the eight ball.
If I were Tory, I would resubmit the FY18 financial report to the Australian Charities and Not for Profits Commission (ACNC) bringing the loss to account – in compliance with Australian Accounting Standards – so she can at least start afresh.
Put it down to ‘experience’, which is, as Oscar Wilde once said, “simply the name we give our mistakes”.
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JAA fails own Vision and Mission Statement